ANALYSIS: Economic revolution in Macedonia

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The economic policies of the Government led by Prime Minister Nikola Gruevski made Macedonian economy stronger than ever. This is illustrated by the many promised and not promised, but realized successful projects, writes Lider.


If nine years ago rarely Macedonia was on the map of foreign investors, today our country is one of the most desirable destinations for business in Europe and the world.

If nine years ago the domestic businesses were unable to realize their ideas and plans because their hands were tied due to exorbitant taxes and levies, today, the image of this field is significantly improved.

If nine years ago entrepreneurship was just “wishful thinking” today support for opening their own business is greater than ever, and the company can be opened in just one day.

If nine years ago, Macedonia was one of the countries with the highest unemployment rate in Europe, in the past years were opened 150 thousand new jobs, and the unemployment rate tends further to reduce the current 25.5%.

If nine years ago infrastructure across the country was in a crisis, and Macedonia was isolated in the field of aviation, today Macedonia is the only country in the Balkans that simultaneously build three highways and the airport is the fastest growing in the region.

If nine years ago the support for farmers was minimal, today they have in abundance.

We write a lot for the economic projects that have been realized over the past nine years and their effects and indication of their success are the statistics.

“Macedonia has results as never before, we do not intend to deviate from this path. Quite the contrary, we plan further to wade harder and with harder pace. The one that can let follow is welcome, the one that does not know should look and learn how should act for the benefit of citizens and the people “, said Gruevski.

Analyzing the economic policy of the Government led by Nikola Gruevski “Lider” decided to present you the chronological projects and economic success through the past years.

In 2006, begin economic changes

In 2006 were increased subsidies from the inherited 6 million to 18 million euro. It was established National Action Plan for Employment 2006-2008.

Public investment were increased from 3% of GDP in 2006. The external debt was decreased by 200 million euro in 2007, from 25% of GDP in 2006 to 19% in 2007.

Procured and granted agricultural machinery under favorable conditions. Adopted decision to allocate 120,000,000 MKD for construction of water supply and sewerage systems in 59 municipalities.

Further liberalize trade within the CEFTA.

In 2006 started the procedure for entry of third operator of mobile telephony market. The market is beginning to diversify, and prices begin to decline.

In 2007 the historical growth of the economy

In 2007 was realized the greatest economic growth in history by 6.1%, exports rise by 60% in the first two years of the Government in 2006 and growth in GDP per capita of 68% compared to 2005-2006 year.

Foreign direct investments in the period 2007-2010 reached 1.272 million euro. That was about 300 million more than the total inflow of foreign investments of all governments of SDSM in the transition period.

According to the renowned World Bank report, Doing Business in competition with 180 countries in 2007, Macedonia was chosen for fourth best reformer.

Paid 25 million euro to farmers in 2007. Wages in the public sector same year increased by 10%.

In 2008, drastic increase in wages and pensions

In 2008, Macedonia recorded GDP growth of 5%, although in the last quarter of the Macedonian economy was already hit by the global economic crisis. The unemployment rate was decreased to 33.5% from 36.5% in the previous year.

Foreign direct investment reached 930 million euro.

Public sector wages were increased by 25%. Pension’s average increase was 35%, and for the lowest 42%, while the social benefits achieved average growth of 30%.

At the end of 2008, VMRO-DPMNE Government reacted and brought the first package of anti-crisis measures worth over 330 million euro. The package consisted of measures for improving the liquidity of companies through reprogramming of payables to the state and forgiveness of interest on part of the obligations, full exemption of companies from paying income tax if the tax is distributed in dividends, reduction of social contribution rates, reductions in tariffs and so on.

Doing Business in 2008 ranked Republic of Macedonia as 18th reformer in the world in terms of business climate in competition of 180 countries.

In 2008, was launched Skopje bypass, which is at the level of highway and part of Corridor 8. Extended, reconstructed more roads across the country, Drenovo- Prilep, intersection near Prdejci, reconstruction Zhirovnica -Boshkov Most, road to Monastery Sv. PReobrazhenie in Krushevo, road to place Vrshnik, the crossroad at Momin Potok … Realized project on rehabilitation and strengthening of bridges part of the corridor 10th

In the area of ​​agriculture was invested in water supply and sewage systems in almost all municipalities. Continued growth of subsidies to farmers. From 20 million euro in 2006 to 25 million euro in 2007, subsidies were increased to 45 million euro in 2008.

Senior students of all faculties received vouchers to buy computers. Voucher worth 15.500 MKD delivered to over 10,600 students.

In 2009, Macedonia is third best reformer in the world

During the crisis in 2009, Macedonia remains one of the countries with lowest deficits in Europe with 2.7% of GDP. Macedonian economy had the third lowest decline in Europe. According to “Doing Business” Republic of Macedonia was chosen for third best reformer in the world in terms of business climate. Macedonia is the 51 place on the list of “Forbes”.

With the second phase of the Regulatory Guillotine were implemented 54 measures to simplify procedures for cross-border trade. The amendment to the Law on Customs Tariff in January 2009 was reduced and the abolition of customs duties for total of 498 goods from customs tariff.

Continuous were build regional and local roads. There is electronic collection of tickets in passenger rail traffic. At the Railway Station in Skopje is installed software, through can be issued tickets electronically.

Paid 70 million euro for agricultural subsidies. Agricultural exports reached 358 million euro. Obtained accreditation of the IPARD payment agency. Continuous implemented allocation of agricultural land and allocated total of 8871 hectares.

Liberalized fixed telephony. In 2009, there were conditions for entering of 6 new fixed alternative operators that started to provide to the citizens of the Republic of Macedonia fixed voice telephony services and 60% discount for international and national calls in the fixed network and 15% lower prices calls towards mobile networks.

Introduced third mobile operator. With the entry of the third mobile operator, consumer baskets were reduced by average 50 percents.

Introduced electronic system for the sale of land. The first public bidding held in July 2009.

A system of licensing of construction companies. It began the process of licensing of transport companies.

Provided visa liberalization for Macedonian citizens! EU visa barrier fell.

In 2010 global crisis, Macedonia prevent mass layoffs

2010 was difficult for the Macedonian economy due to global economic and debt crisis. World events have stopped the accelerated development of the national economy and brought serious new challenges that Prime Minister Nikola Gruevski and the Government successfully confronted and tackled. It was maintained the stability of the economy, no layoffs of employees and closing of companies. Introduced anti-crisis measures to protect the banking sector.

Macedonia remained low indebted country with one of the lowest deficits in Europe of 2.7% of GDP. Prevented mass layoffs at the administration or reduction of social aid, something that was happening in many European countries.

Kept are low taxes, at a time when over 80% of European countries have increased taxes or fees imposed new crisis. The unemployment rate of 36.5% in 2006 was decreased to 30.9% in January 2011. This is the lowest level of unemployment in the last 10 years.

Macedonian currency remained stable thus directly contributes to the protection of the citizens’ standard. Kept stability of the banking system.

In 2010, Republic of Macedonia has progressed by 5 places on the world list of competitiveness of the Economic Forum and was ranked at the 79th place in the competition with 139 countries. By this, the country has progressed by 15 places on the list of Forbes, which was doing assessment according to the terms of doing business.

One square meter per euro – began redemption of yard land for the individual houses and apartment buildings for only 1 euro or 61 MKD per square meter. Until then, per square meter plot of land was paid up to 13 euro or 800 MKD.

Began the legalization of illegal buildings by adopting the Law on Treatment of Illegally Constructed Buildings. With that finally was made possible to legalize existing illegal buildings with symbolic price of one euro per square meter.

Adopted decision for one euro starting price for the sale of state land, which according to the detailed urban plan envisaged the construction of individual houses, multi-storey car parks, commercial facilities, factories, plants, hotel facilities, as well as buying and distribution centers for agricultural products.

Regulatory Guillotine project significantly simplified regulation, cheaper services and reduced number of required documents in administrative procedures.

Import of used cars – from March 13, 2010 motor vehicles are cleared according to the changes of the Law on Customs Tariff and changes to the Law on Excise. This created conditions to renew the fleet in Macedonia with newer.

Foreign Investment Agency in cooperation with the Ministry of Foreign Affairs sent 30 economic promoters in the most developed countries in order to promote investment opportunities in the country.

Single system facilitates for conducting the business. Introduced electronic services at PRO. Introduced electronic system for registration and termination of employment.

The deadline for registration of legal entities was reduced to 4 hours.

Reconstructed several roads, starting activities for gasification of the Republic of Macedonia. Began the project on introduction of energy efficiency of buildings in the country.

The Government has continually increased subsidies for farmers and in 2010 they reached 100 million euro. In 2010 was achieved the highest price for buying tobacco and it was 192 MKD per kilogram.

Increased pensions and wages – pensions were increased by average of 33.5% and the lowest 40%. The average net wage in the country was increased by 61%.

Since September 2010 began implementation of the project Energy poverty. Reduced excise duties on petroleum products to mitigate the oil price surge on world markets, the prices of these fuels decreased substantially.

Continuing to reduce the cost of mobile telephony.

In 2011, huge number of foreign companies have started business in Macedonia

In 2011, was reduced the unemployment rate to its lowest level in the last 10 years to 30.9 percent. The number of employees in the country in 2011 was increased by 95,000 compared to 2006. This result was achieved against the risks and threats of the global economic crisis.

Completed reconstruction of 62 local roads in length of 140 km, worth around 575 million MKD.

Paid 115 million euro to farmers in 2011.

Completed construction of the airport “Alexander the Great” in Petrovac and airline “Wizz Air” started offering services for cheap flights.

In 2011, projects for construction of housing for disadvantaged individuals and other vulnerable groups through “Project for Housing for Vulnerable Groups”.

In 2011, newly arrived 67 double-decker buses.

Increased the amount of social assistance for 26%.

According to the report “Doing Business” of the World Bank, Macedonia is the first country in Europe and Central Asia in relation to fast opening of business, and fifth in the world.

In 2011, Macedonia became one of the first 7 countries with the highest economic growth in Europe.

Provided support of 10.7 million euro for small and medium-sized enterprises dealing with processing purchase and export of agricultural products.

Opened more factories as the Johnson Matthey plant, investment worth 60 million euro with over 100 new jobs, Kemet Electronics, investment worth 25 million euro with 500 new jobs, the second factory of Johnson Controls investment worth 20 million euro and 1427 new jobs, Kromberg & Schubert investment of 20 million euro and 2,500 new jobs. Furthermore, factories as are Drexel Meyer with 4000 new jobs, Agrokor investment worth 20 million euro and 300 new jobs, Motherson Group investment worth EUR 12 million euro with 160 new jobs, Alliance One investment worth EUR 10 million euro and 150 new jobs, Tehnohoze investment worth 10 million and 150 jobs, Euro-Italy investment worth 10 million euro and 200 new jobs, Protek Group with investment worth 5 million euro and 150 jobs, Einflou with investment worth 5 million euro and 100 new jobs, Style with investment worth 3.5 million euro and 100 new jobs and Van Hool with investment worth 20 million euro and 500 new jobs.

Government started road shows and were organized economic visits for the purpose of presenting economic potentials and benefits that Republic of Macedonia offers to foreign investors doing business in Germany, Austria, Russia, China, India, Qatar, United States, United Kingdom, United Arab Emirates, Finland, Sweden, Denmark, Norway, Azerbaijan, Kazakhstan, Hungary, Singapore, Japan, Malaysia, Netherlands, Belgium, France, Italy, Turkey, Switzerland and Ukraine.

In 2012 sparkled new roads

Historical highest average gross investment of GDP was recorded in 2012 – 29.4%. Reduced unemployment to 30.6%. Macedonia is the only country in Europe that recorded decrease in the unemployment rate in terms of global and European debt crisis

Improved liquidity in the private sector with full payment of arrears. In late 2012 and early 2013 were paid all budget liabilities to the private sector amounted to 92 million euro.

Introducing e-services for citizens – In addition to companies from February 2012, electronic tax services became available to individuals.

Agricultural support by abolished customs duties. Supported food industry by reducing and abolishing customs duties, and increased competitiveness of domestic production.

Third year of implementation of project “Buy a house, buy a flat.” In the period January 2012-January 2014 the total amount of approved subsidies was more than 1.5 million euro.

The project “Debenture” started in early 2012 and is successfully being implemented.

Government in collaboration with the business community (Chambers of commerce, Associations) in March 2012 adopted package of 72 measures to improve the business environment in the country with appropriate two-year Action Plan, created on the basis of detailed analysis of the movement of the index of global competitiveness World Economic Forum.

Johnson Controls, US company from the automotive industry in August 2012 began construction of second plant in Macedonia TIDZ Shtip on the area of 13.230 square meters.

In October 2012, factory Kemet Electronics officially started production, and the total investment is worth 35 million US dollars and provided employment for around 500 people.

In July 2012, the Government signed investment agreement worth 35 million euro with Drexmajer, German automotive company and manufacturer of electronic equipment and cable installations.

In July 2012, the Government signed investment agreement worth 20 million euro with Van Hool and provided employment for 500 people in the Technological Industrial Development Zone Skopje 1.

Techno Hose registered Wittek Macedonia and buy built factory in TIDZ. In October 2013, the company announced second investment in Macedonia and investment of additional 11 million euro.

In October 2012, Prodis started working in the newly built factory in Skopje Technological Industrial Development Zone 1 on area of ​​4,500 m2. The investment is worth over 5 million euro and opened 130 new jobs.

Van Pinebrook textiles, Dutch company in the textile industry. In September 2012 adopted decision and started building factory in the industrial zone in the village Kadino, Municipality Ilinden.

During 2012, started with the direct credit support to export companies that import agricultural products.

Rehabilitated several sections across the country. Began construction of new motorway section Demir Kapija-smokvica with length of 28.2 km. Reconstruction of the railway Bitola- Kremenica (border with Greece) branch of Corridor 10d. Rehabilitation and upgrading of major rail stations along Corridor 10 and the branch 10d. Rehabilitation and upgrading of the railway station in Skopje. Renovated 10 carriages for passenger transport.

Although were not promised before, realized projects for EUR 1 / m2 of land under legalized facilities for family housing. 1 Euro / m2 for the alienation of land.

Reduced cost of land for industrial buildings. Prepared urban planning documents of importance to the Republic of Macedonia

At the end of 2012 was established Real Estate Cadastre on the whole territory of Macedonia. Title deeds went into the history and property deeds have become proof of ownership of land and buildings.

Constructed National Arena “Philip II of Macedonia.”

In autumn 2012 completed one of the largest investment activities in energy in the country for the modernization and revitalization of the aggregates of TPP Bitola, worth 56 million euro.

Supply of new city buses in Skopje and open double-decker tourist buses for Skopje and Ohrid.

Reduced VAT rate from 18% to 5% for the tourist accommodation with breakfast, half-board and full boarding in all commercial catering facilities.

Project on subsidizing organized foreign tourist turnover that increased the competitiveness of domestic travel offer, increased the number of foreign tourists and foreign currency inflow into the country.

Introduces broadband and Wi-FI in rural areas.

Enabled direct lending to agriculture by the Macedonian Bank for Development Promotion.

For the first time in the history of independent Macedonia, after 20 years of negotiations between the social partners, was reached agreement to establish the minimum wage. Law on minimum wage began to be applied from January 2012 and was set in the amount of 8.050 MKD net.

In 2013, growth of capital investments

Despite the fact that many EU countries are still in recession or have minimal positive growth, Macedonia’s economy in 2013 had GDP growth of 3.1%, which is fourth best in Europe and the best in the region of Southeast Europe. A similar economic growth was realized in 2010 and 2011 (2.8% -2.9%).

Economic growth was driven by high capital investment budget and export firms – FDI in TIDZ and industrial zones.

Capital investments in 2013 amounted to nearly 20 billion MKD, increase of 29% compared to 2010.

Increase in pensions in 2013. – In addition to regular statutory indexation in March 2013 all kinds of pensions further increased by 5%.

The construction sector had the highest historical growth rates of 32.7% in 2013, which cannot be compared to growth in any previous period.

In 2013, the unemployment rate in Macedonia was decreased to 28.6%, which is the lowest level in 17 years.

In the latest Global Competitiveness Report of the World Economic Forum in 2013, Macedonia was ranked at 73 place, which is significant progress from 21 place compared to the 2007.

Johnson Matthey, British manufacturer of catalysts for the automotive industry, in November 2013 completed the second investment in the Technological Industrial Development Zone Skopje 1 by opening new production plant.

Schubert, German company in the automotive industry, officially began operations in October 2013 with staff of around 1,000 people in three shifts.

Van Hool began operations in July 2013 and at the end of 2013 had successfully implemented its plan, produced and delivered 90 buses for the US market.

Grishko, Russian company, the world’s producer of ballet equipment in March 2013 began producing ballet shoes village Slepche, Demir Hisar.

Van Pinebrook textiles, Dutch company in the textile industry, in October 2013 officially put into operation the plant.

In December 2013, the Government signed agreement with Marquardt for investment worth 35 million euro and plan for the employment of over 600 people, out of which one third are engineers.

Istem Medical is Turkish company in the field of medicine, which in April 2013 decided to invest 8 million euro in Macedonia and hire 250 people in period of 10 years in TIDZ Skopje.

In 2014, Macedonia is a country with the best business climate

According to “Doing Business” Macedonia has the best business climate in Southeastern Europe and is ranked ahead of 19 EU Member States. Macedonia had great progress on all reputable rankings for different aspects of the business environment.

The banking sector remained stable, primarily because of good regulation that regulates the operation of banks and adequate supervision by the Central Bank.

Pensions were increased by 5%, i.e. 600 MKD for all pension beneficiaries starting from March 2014. With these increases, the average pension reached 12 445 MKD, which represents increase of 62% compared with 2006 when the average pension was 7683 MKD, while the lowest pension is increased by 76%, and the highest by 30.4%.

After the increase in public sector wages by 25% in the period before the crisis, the state budget for 2014 provided funds to increase public sector wages by 5% starting with the October salary.

Increasing of the minimum wage in the country is implemented starting from March 2014 and will end in March 2016, by which the minimum wage will be increased to the amount to 10,080 MKD. Since March 2014, the minimum wage rose from 8.050 MKD to 8,800 MKD per month, from March 2015 the minimum wage was 9,590 MKD and in March 2016 will be 10,080 MKD, and employers will be obliged to increase the minimum wage.

Macedonia remained the country with the lowest taxes in Europe.

Amphenol in January 2014 officially announced its brown field investment in Kochani worth 6 million euro and employment of 1500 people by 2018.

Enda in February 2014, decided to invest in Macedonia 2 million euro and to hire 450 IT engineers.

Apple Land, company from Dubai in February 2014 began construction of redemption distribution center for processing and storing apples in the industrial zone Makazi near Resen.

Antura, Dutch company specialized in horticulture, in February 2014 decided to invest in Kochani.

Introduced cheap flights to Europe. With the signing of the financial support between the Government and “Wizz Air” were established 8 new destinations from the airport “Alexander the Great”.

Continued the reconstruction and construction of roads and highways. Growth of subsidies for farmers.

In 2015 the historical decline in unemployment

Through active employment measures implemented by the Government and the “Macedonia employs” and the entry of foreign investors, the unemployment rate dropped to lowest level of 25.5%. It is great success for the Government led by Nikola Gruevski.

Macedonia, according to data from the European statistics office – Eurostat, is the fourth least indebted country in Europe. According to “Doing Business”, Macedonia sixth in Europe, 12th in the world out of 189 countries. Macedonia is three positions above Competitiveness Report of the World Economic Forum.

Foreign companies continue to enter in Macedonia, although the country faces political crisis. Due to it, the trend of economic growth, experts say is losing one percentage point; however, the economy continues to stand on its feet. Capital investments continue at the highest level, industrial production grows, invest in every field in the country.

American Delfay decided to invest in the zone in Skopje and employ 500 people. After the success in Shtip, Johnson Controls announced opening of new facility in Strumica, which will create 1,500 new jobs. German Costal officially began with the investment of 50 million euro and the first 1,000 employments.

US Key Safety Systems begun its facility in Kichevo and should complete construction by June 2016. Started work of Italian Diatek Makdia, which should employ 200 people. Technique Textile Shtip built the plant in which will have to employ 1,000 people.

Tehnohoze realized its second investment in the zone in Skopje and started hiring, while Gentherm is at advanced stage of construction of its plant in Prilep. The US corporation Lear has plan for 3,000 new jobs in Tetovo and investment worth 15 million euro.

German Marquardt finished the investment in Veles worth 35 million euro and in the new plant will employ 600 people and is planned expansion of capacity. Antura, Dutch company opened its new facility in Kochani with plans for 300 employees.

German Akomplast announced that in January begins construction of the plant and start of production is expected in April-May 2016. US Capcon in Skopje opened  new plant for airbag inflators, which will be create 400 jobs.

The second plant of Amphenol began operating in Kochani at the interim facility, which employed 650 people and their plan is after the finish of investment divisions to reach 3,500 new employments. Italian company Condeva invested around 30 million euro and builds object and will need to hire more than 280 unemployed people and simultaneously will be built the new factory of German company ODV Electric, which will be built by June 2016, and will employ 1000 unemployed people from Ohrid and Struga. It was signed contract with Montante Group from Italy, which will employ 400 people.

At the same time, for the first time, two domestic companies- suppliers of famous brands announced their decision to invest in the technological industrial development zones. The companies Hay- Tech and Plus TT together will hire 500 unemployed people.

Free economic zones in all regions of the country are being build or being announce to be built.

Implemented the project for transformation of employment in public institutions. It continues the project for building social housing, and written off over 30 million debts of socially vulnerable categories.

The Government allowed free projects for construction of houses with which citizens would save from 1,000 to 2,000 euro.

Arrived the new electrically train for the Macedonian Railways.

Increased agricultural subsidies, investments in water systems and new machinery.

Continued increase in pensions. About 300,000 pensioners received the promised increase of 621 MKD – newly announced for 2016.